No.
2051
of
2004
Contract - construction of contract - joint venture agreement -
party's right to assign interest without consent of other party.
Contract - implied duty of co-operation - nature and extent of duty - whether
party's exercise of contractual rights to assign interest
without consent
hinders or prevents other party from obtaining benefit of contract.
Contract - implied duty of good faith and fair dealing - nature and extent of
duty -transaction structured for sole purpose of enabling
assignment to occur
without other party's consent - whether assignor acting in bad faith.
- The plaintiff ("Esso") and the first defendant ("SPP") are
parties to the Rundle Joint Venture Agreement ("the JVA"). This case
concerns
the rights of SPP to assign its interest under the JVA to a proposed new
special purpose vehicle, without the consent of
Esso.
- Esso argues that it must be consulted if SPP's interest is
assigned to the new company and that it has a pre-emptive right to bid
for the
stake. Esso seeks an injunction to permanently restrain SPP and its
administrators from giving effect to SPP's assignment
proposal, which is
contained in a draft deed of company arrangement. SPP seeks a declaration that
the proposed assignment is permitted
by the JVA.
The Rundle Joint Venture
- The Rundle Joint Venture relates to an area near Gladstone,
Queensland in respect of which the joint venturers hold certain mineral
tenements. The object of the joint venture is to mine shale, carbonaceous
material and other associated minerals and then process
them to produce shale
oil liquids, a product equivalent to naturally occurring crude oil. The Rundle
deposit is estimated to have
reserves of approximately 2 billion barrels of
crude shale oil, naphtha and gas.
- The JVA establishes an unincorporated joint venture between
Esso, SPP and Central Pacific Minerals NL ("CPM"). Esso holds a 50%
interest,
and SPP and CPM each hold a 25% interest (respectively, "the SPP JV interest"
and "the CPM JV interest"). SPP and CPM
are treated as a single participant
for the purposes of much of the JVA.
- The parties first discussed the possibility of forming a joint
venture to exploit the Rundle deposit in around 1979. At that time,
SPP and
CPM held the mineral rights and were looking for a partner. They called for
submissions from interested parties. In February
1980, Esso submitted a bid
containing three alternate proposals. Later that month, SPP and CPM announced
the selection of one of
Esso's proposals.
- On 3 July 1980, the parties executed the initial heads of
agreement. The initial joint venture agreement was executed on 18 December
1981.
- In early 1985, the parties began to negotiate a revised joint
venture agreement. The commercial aspects of these negotiations were
finalised
in late February and new heads of agreement were signed on 15 March 1985.
Following further negotiations, the JVA was executed
on 18 July 1985.
- Active development of the Rundle deposit ceased in the latter
part of the 1980s when, due to falling world oil prices, Esso withdrew
from the
shale oil industry in the USA and announced a deferral of the Rundle project.
In the event that the Rundle project is started
up again, it will require the
investment of hundreds of millions of dollars under the JVA.
- At the time of execution of the JVA in 1985, both SPP and CPM
were listed public companies. In March 2002, the shareholdings in
SPP and CPM
were merged under court-approved schemes of arrangement. After the merger,
there was a single listed public company,
being SPP; CPM was its subsidiary.
SPP has over 11,000 shareholders. SPP currently holds 90.4% of the issued
capital in CPM, with
the remaining shareholders of CPM having a right to elect
to defer converting their CPM shares to SPP shares for up to 10
years.
Receivership
- In May 2003, both SPP and CPM granted fixed and floating
charges in favour of Sandco Koala LLC. On 2 December 2003, the chargee
appointed David Winterbottom and Angus Blackwood of Ernst & Young as joint
receivers and managers of SPP, CPM and a number of
subsidiary companies.
- On 13 April 2004, the receivers and managers announced the
completion of the sale of the majority of the business and assets of
SPP and
CPM to Queensland Energy Resources Ltd ("QERL"). Apparently there will be a
substantial shortfall on the recovery of the
secured debt. Any other assets or
funds that SPP hereafter acquires may be taken by the receivers and managers to
satisfy the charges.
- The SPP and CPM JV interests were not secured by the charges
and accordingly were not sold by the receivers and managers.
Administration
- On 13 February 2004, the board of directors of SPP appointed
Peter Geroff, Will Colwell and Andrew Love of Ferrier Hodgson ("the
administrators") as administrators of SPP under the provisions of Part 5.3A of
the Corporations Act 2001. On 5 March 2004, the administrators were
appointed as administrators of CPM. The appointments were ratified at the
first creditors'
meeting of SPP on 20 February 2004 and of CPM on 12 March
2004.
- The second meetings of creditors were convened to be held
concurrently on 14 May 2004. On 6 May 2004, Mr Geroff issued a report
on
behalf of the administrators pursuant to s.439A(4)(a) of the Corporations
Act 2001. In that report, the administrators noted that they had commenced
inquiries to identify third parties who may be interested in acquiring
the SPP
and CPM JV interests, as well as the possible restructuring and
recapitalisation of the companies. They noted that it would
not be possible to
finalise their inquiries prior to the creditors' meetings on 14 May 2004.
Accordingly, they recommended that the
meetings be adjourned for up to 60 days
to enable inquiries to be finalised. The creditors accepted the recommendation
and adjourned
the meetings.
- On 6 July 2004, Mr Geroff issued a further report to
creditors. This report noted that the administrators had received a number
of
expressions of interest to acquire the SPP and CPM JV interests but had not yet
received a formal offer.
- On 6 August 2004, Mr Geroff wrote to Esso, outlining proposals
that QERL had made with respect to acquiring the SPP and CPM JV interests.
QERL had offered to purchase the SPP JV interest, subject to a number of
conditions, and to purchase the shares held by SPP in CPM
("the QERL offer").
One of the conditions of the QERL offer was that Esso not exercise its
pre-emptive rights under the JVA. Mr
Geroff asked Esso whether it would
consent to a sale to QERL on the terms outlined in his letter, including
whether Esso agreed to
waive its pre-emptive rights.
- Esso responded by letter dated 9 August 2004, indicating that
it would require some time to analyse the QERL offer and would not
be in a
position to provide consent or otherwise prior to the suggested date of 16
August 2004. Esso also said that it understood
that the 6 August letter had
triggered a 90 day period for exercising its pre-emptive rights under clause
24.06 of the JVA.
- Ten days later, Esso informed the administrators that it was
now of the opinion that Mr Geroff's letter of 6 August did not operate
as a
trigger for the purposes of the JVA. It also said that, for the avoidance of
doubt, Esso's present position was that it was
not prepared to waive its rights
as set out in clause 24, or any other provision, of the JVA.
- The administrators circulated a further report to creditors,
dated 17 August 2004. That report provided further details of the
QERL offer
and described a separate, associated offer from Ascent Capital Pty Ltd to
recapitalise SPP. The 17 August report also
referred to an offer for the SPP
and CPM JV interests from John Allen Browning, as agent for SPV, a public
company yet to be incorporated
("the Browning offer'). The report noted that
Browning claimed that the structure of this proposal meant that, should it be
accepted
by the creditors, Esso's consent to the Browning offer was not
required, as SPV would be a "related corporation" of SPP and CPM within
the
meaning of the JVA.
- After considering the 17 August report, Esso informed the
administrators that its preliminary view was that the Browning offer was
outside the terms of the JVA and Esso did not consent to it.
- On 24 August 2004, a further concurrent creditors' meeting of
the two companies occurred in Brisbane. The commencement of the meeting
was
delayed for approximately half an hour due to the tabling of an amended
Browning offer and an amended QERL offer. The amended
Browning offer was now
split into two offers - one to SPP and a separate one to CPM. Neither was
dependent on the other, so that
either of the companies could assign its
interest in the joint venture to SPV. SPV would also have the right to dispose
of the Rundle
assets at any time as part of the amended offer. The QERL offer
was amended so as to remove as a pre-condition the obtaining of
Esso's consent
to the purchase of SPP's shares in CPM.
- At the 24 August meetings, a majority of creditors of SPP in
number and value approved a deed of company arrangement based on the
amended
Browning offer ("the draft DOCA"). A majority of creditors of CPM approved a
deed of company arrangement based on the amended
QERL offer, in so far as it
related to CPM.
- Because QERL will be acquiring 100% of the shares in CPM,
there will be no assignment under clause 24 of the JVA and the acquisition
will
therefore not trigger Esso's pre-emptive rights. The deed for CPM was executed
on 14 September 2004.
- The draft DOCA for SPP remains unexecuted.
The current proposal
- The draft DOCA requires SPP to transfer the SPP JV interest to
SPV, in exchange for SPV paying $175,000 into a trust fund for the
benefit of
the administrators and unsecured creditors. The proposed assignment deed is
attached to the draft DOCA.
- The draft DOCA provides for three categories of unsecured
creditors: small creditors, Pool A creditors and Pool B creditors. In
exchange
for extinguishment of their debts, the small creditors receive a share of the
payment by SPV to the trust fund, and the
Pool A and Pool B creditors must
elect between receiving equity in SPV or a share (if any) of the funds paid by
SPV to the trust
fund.
- The draft DOCA provides for the participating Pool B creditors
to lend approximately $250,000 to SPV to establish a working capital
facility.
In that way, it is said that an insolvent joint venture participant, SPP, will
be replaced by a solvent one, SPV.
- SPV will assume SPP's obligations under the JVA. SPP will
guarantee the performance of SPV under the JVA.
- SPV reserves the right to dispose of the Rundle assets at any
time, subject to the provisions of the JVA.
- SPP agrees to cause the appointment of three named persons as
the directors of SPV. The agent consents to their appointment. SPP
will do
all things necessary to ensure that SPV is a subsidiary of SPP at all relevant
times.
- SPP will be placed into liquidation after the assignment to
SPV, to enable the creditors to claim a write-off for tax
purposes.
- Esso alleges that this proposal will be in breach
of:
(a) Clause 24 of the JVA, by transferring the interest nominally,
but not in substance, to a "related corporation";
(b) Clause 27 of the JVA, which requires participants to use
their best endeavours to avoid conflict with the best interests of other
participants;
(c) An implied term of the JVA that each participant do all such
things as are necessary on its part to enable the other to have the
benefit of
the JVA;
(d) An implied term of the JVA to exercise SPP's rights in good
faith.
- It is not this Court's task to assess the draft DOCA or to
determine whether it is in the best interests of creditors. My task
is to
consider whether the proposals in the draft DOCA are permitted by the
JVA.
- The draft DOCA must be executed by SPP within 21 days after
the meeting of creditors or within the time allowed by a court following
an
application made within those 21 days.[1] The
Federal Court has extended the time for executing the DOCA pending the
resolution of the issues in this proceeding.[2]
The Federal Court proceeding has been adjourned for further mention on 26
November 2004.
History of this proceeding
- On 13 September 2004, Esso applied to this Court on an ex
parte basis seeking interlocutory injunctive relief. Smith J granted
a
temporary injunction until 20 September 2004, restraining SPP and the
administrators from dealing with the SPP JV interest "except
pursuant to
Article 24.01(b)" of the JVA, that is to say, except with the consent of
Esso.
- This proceeding was commenced on 14 September 2004, and the
injunction application was made returnable before Dodds-Streeton J on
17
September 2004. Her Honour extended the interlocutory injunction until trial
or further order. Her Honour also made an order
giving the directors of SPP
power to defend the proceeding on behalf of SPP, pursuant to s.447A of the
Corporations Act 2001. The administrators are the second to fourth
defendants but have taken no active part in this proceeding. They have
indicated that
they will abide by any orders of the court.
- On 22 September 2004, Smith J refused an application by
SPP for an order transferring this proceeding to the Federal Court in New
South
Wales.
- On 15 October 2004, Dodds-Streeton J made various orders
for interlocutory steps leading up to an expedited trial date.
The assignment provisions
- Clause 24[3] of the JVA deals
with the rights of the parties to assign their interests in the JVA.
- Clause 24.01 is in the following terms:
"(a) Each Participant shall have the right to assign all or part of
its Interest to a Related Corporation without the consent of the
other
Participant, subject only to the Related Corporation's assumption of the
assignor's obligations under the various agreements
relating to the Joint
Venture and the assignor guaranteeing the performance of the Related
Corporation. Such guarantee will not
cease merely because the assignee ceases
to be a Related Corporation.
(b) Subject to this article each Participant may with the prior
written consent
of the other, which shall not be unreasonably withheld, assign all or part of
its Interest to a third party ('Relevant
Interest').
(c) On assignment of a Relevant Interest, this agreement shall be modified so
that the rights and obligations of the
assignor are shared with the assignee in
proportion to the Interest assigned."
- "Related Corporation" is defined in clause 1.01 of the JVA as
having "the same meaning as ascribed to that term by section 5(1) of the
Companies Act 1981. Without limiting the generality of the foregoing a
corporation shall be deemed to be a Related Corporation of SPP/CPM if it is
a
Related Corporation of either SPP or CPM".
- Clause 24.04 permits a participant to use its interest under
the JVA as security for financing, with the prior written consent of
the other
participant.
- Clause 24.03 deals with consent:
"(a) It shall not be unreasonable to withhold consent to any
proposed assignment of a Relevant Interest by a Participant if:
(i) such
assignment would result in there being more than 4 Participants in the
Joint Venture (SPP together with CPM constituting one Participant);
(ii) the assignee is not substantial and not capable of meeting the obligations
of a Participant;
(iii) any Participant can demonstrate
within 60 days after receiving notice of
a proposed assignee that such assignment would or is likely to result in a
breach of the
Trade Practices Act 1974 of the Commonwealth of Australia
or the antitrust laws of the United States; or
(iv) the proposed assignment would require [Esso]
to divest itself of any of
the Interest held by it to comply with the foreign investment guidelines of the
Commonwealth Government.
(b) If a chargee wishes to sell the whole or part of a Participant's Interest,
pursuant to clause 24.04(b)(ii) consent may be withheld
only in the
circumstances outlined in subparagraphs (a)(i) to (iv)."
- Clause 24.02 of the JVA provides that where a participant
wishes to dispose of a relevant interest, or a chargee wishes to sell
the whole
or part of a participant's interest, it shall be entitled, at its election,
either to auction the relevant interest pursuant
to clause 24.05 or to sell it
pursuant to clause 24.06.
- Clause 24.05 sets out the requirements for a sale by auction,
where a participant elects to auction a relevant interest. The other
participant is entitled to bid at such an auction.
- Clause 24.06 sets out the provisions which govern sale by
private treaty where a participant elects to dispose of a relevant interest
by
way of sale other than by auction. It must first give the other participant
notice of the minimum price at which it is prepared
to sell the relevant
interest. The other participant has the right to purchase within 90 days of
notice, for the minimum price.
- Clause 24.07 requires an intending assignor to give not less
than 30 days notice of a proposed assignee.
- Clause 24.10 provides that every assignment pursuant to clause
24 shall be made expressly subject to the JVA and upon the express
condition
that the assignee assumes all obligations, liabilities and duties of the
assignor under the JVA.
The Companies Act
- Section 5(1) of the now repealed Companies Act 1981
(Cth) includes the following:
" 'related corporation', in relation to a corporation, means a
corporation that is deemed to be related to the first-mentioned corporation
by
virtue of sub-section 7(5)."
- Sub-section 7(5) provides as follows:
"Where a corporation -
(a) is the holding company of another corporation;
(b) is a subsidiary of another corporation; or
(c) is a
subsidiary of the holding company of another corporation,
that first-mentioned corporation and that other corporation shall, for
the
purposes of this Act, be deemed to be related to each other."
- Here, it is proposed that SPV will be a subsidiary of SPP
through SPP's having the power to appoint directors, with the consent
of Mr
Browning. SPP will not be a shareholder in SPV.
- Sub-section 7(1)(a)(i) provides that, for the purposes of the
Act, a corporation shall be deemed to be a subsidiary of another corporation
if
that other corporation controls the composition of the board of directors of
the first-mentioned corporation. This is the sub-section
which is relied upon
by SPP.
- Sub-section 7(2) relevantly provides that the composition of a
corporation's board of directors shall be taken to be controlled
by another
corporation inter alia if that other corporation can appoint or remove all or a
majority of directors, whether with or
without the concurrence or consent of
any other person.
Construction of the assignment
provisions
- The meaning of the terms of a contractual document is to be
determined by what a reasonable person would have understood them to
mean.
That normally requires consideration not only of the text, but also the
surrounding circumstances known to the parties, and
the purpose and the object
of the transaction.
- Esso sought to tender draft contracts and other documents and
affidavit material relating to the negotiations which preceded the
JVA or
earlier agreements between the parties. In my opinion, this material went only
to the subjective intentions or understandings
of the parties and did not
satisfy the objectivity requirements laid down by the High Court in cases such
as Codelfa Construction Pty Ltd v State Rail Authority of NSW[4], Pacific Carriers Ltd v BNP Paribas[5] and Toll (FGCT) Pty Limited v
Alphapharm Pty Limited.[6] I ruled
in the course of the trial that this material contravened the parol evidence
rule and was inadmissible.
- It is well-established that in giving meaning to the words of
a commercial agreement courts should give the words the natural meaning
which
they bear. However, if there is any ambiguity, the court should endeavour to
avoid a construction which makes commercial nonsense
or is shown to be
commercially inconvenient.
- Stephen J described the rule in Australian Broadcasting
Commission v Australian Performing Right Association Ltd[7]:
"This agreement is one in which, in my view, two corporations
have determined, in unambiguous terms and in a formal document obviously
prepared with legal assistance, their quite complex contractual relationship
for a considerable term of years into the future. The
approach of courts to
the construction of such documents, when they contain no ambiguity nor any
other patent error or omission,
cannot be other than that of an uncritical
rendering of the meaning of the text."
- Gibbs J noted in the same case:
"If the words used are unambiguous the court must give effect to
them, notwithstanding that the result may appear capricious or unreasonable,
and notwithstanding that it may be guessed or suspected that the parties
intended something different. The court has no power to
remake or amend a
contract for the purpose of avoiding a result which is considered to be
inconvenient or unjust. On the other hand,
if the language is open to two
constructions, that will be preferred which will avoid consequences which
appear to be capricious,
unreasonable, inconvenient or unjust, 'even if the
construction adopted is not the most obvious or the most grammatically
accurate'
to use the words from earlier authority... the court should construe
commercial contracts `fairly and broadly, without being too
astute or subtle in
finding defects'."[8]
- In the present case, in my opinion there is no relevant
ambiguity in the provisions under consideration. They simply produce a
result
which Esso finds commercially unacceptable.
- Clause 24.01(a) contains certain requirements for an
assignment to occur without consent:
(a) It must be to a "related corporation" within the meaning
chosen by the parties;
(b) The assignee must assume the assignor's obligations under the
JVA and related contracts;
(c) The assignor must guarantee the obligations of the
assignee;
(d) The assignor's guarantee must be a continuing
one.
- In construing clause 24, I bear in mind that the JVA is a
commercial agreement entered into by substantial companies, who were capable
of
looking after their own commercial interests and ensuring that the JVA
reflected their final agreement. The JVA is the latest
in a series of
contracts between the parties and was entered into after lengthy negotiations
and, presumably, the obtaining of legal
advice.
- There are a number of strands to Esso's construction argument,
which are considered below.
General structure of clause 24
- Esso says that the general structure of clause 24 is that
assignments require the consent of the other participant, and that an
assignment to a related corporation without consent is an exception to this
general rule.
- On the other hand, SPP says that there are two separate and
wholly independent assignment regimes provided for in clause 24. First,
clause
24.01(a) provides for assignment without the necessity of the other
participant's consent. Secondly, clause 24.01(b) and
the remainder of clause
24 provide for assignment requiring the consent of the other
participant.
- I agree with SPP's submission as to the general structure of
the clause. Clause 24.01(a) is not in its terms expressed to be subject,
or an
exception, to clause 24.01(b). Nor is it obvious, when one looks at the nature
of the rights and obligations granted by the
sub-clauses, that one must be an
exception to the other. They are two distinct provisions covering discrete
situations: assignment
to related corporations without consent and assignment
to anybody else with consent.
- It is true that most of the sub-clauses in clause 24 are
concerned with assignments with consent, and govern matters such as when
consent may be withheld or the procedures by which interests may be sold. It
is hardly surprising that these matters require some
detailed elucidation. The
fact that there are more provisions dealing with consensual assignments does
not mean that one should
read down the ordinary and natural meaning of clause
24.01(a), so as to read it as an exception to a general rule that assignments
require consent.
Meaning of "subsidiary"
- In construing the expression "related corporation" in clause
24.01(a), Esso accepts that sub-sections 5(1) and 7(5) of the Companies
Act 1981 apply. However, it does not accept that the extended statutory
definition of "subsidiary" in sub-sections 7(1) and (2) of that Act
applies.
- Esso concedes that, if the extended statutory definition
applies, SPV will be a related corporation of SPP. This is because, at
the
time of the proposed assignment, SPP will control the composition of SPV's
board.[9]
- Esso points to the fact that s.7(5) deems certain corporations
to be related corporations "for the purposes of this Act." It says that the
extended definitions of "subsidiary"
elsewhere in s.7 operate for the purposes
of the Act, but not for the purposes of the JVA. It argues that "subsidiary"
in s.7(5) should be given its "natural meaning", so that there would have to be
some substantial degree of ownership for a company to be a
subsidiary, rather
than its extended meaning.
- There is no justification for such a construction. In
drafting the JVA, the parties chose to incorporate a statutory definition
of
"related corporation." Section 7(5) is a deeming provision and must
necessarily include previous sub-sections in which the concept of "subsidiary"
is defined. Had the
parties wanted to adopt some other definition of
"subsidiary", such as a "natural meaning" (whatever that might mean), they
could
have done so.
Right to choose fellow joint
venturer
- Esso argues that clause 24 confers important and valuable
rights upon the non-assigning participant. The right to determine with
whom it
will be in a contractual relationship is said to be "a fundamental necessity"
in a long term joint venture agreement such
as this one. It is said that the
JVA must be construed in a way that protects such rights.
- However, any such rights must be considered in the context of
the JVA as a whole.
- Clause 24 confers important and valuable rights on the
assigning participant as well as the non-assigning participant. As long
as the
assignor provides an ongoing guarantee and the assignee assumes the assignor's
obligations under the JVA, it is entitled to
assign without consent to a
related corporation.
- The JVA also allows for change of ownership of any
participant. There is no provision to the effect that a change of ownership
will constitute an event of default or entitle one party to acquire the other's
interest. In the present case, QERL will be acquiring
all the shares in CPM
under its deed of company arrangement and will effectively become Esso's new
joint venture partner. It will
do so without Esso having any say in the
matter. There is no suggestion that such an acquisition is not permitted under
the JVA.
- Similarly, if SPV became SPP's parent company (instead of
becoming its subsidiary and taking an assignment of the CPP JV interest),
it
could effectively become Esso's new joint venture partner, without Esso having
any say in the matter.
- Alternatively, SPP could assign the SPP JV interest to a
wholly-owned subsidiary (in the traditional sense) and then sell the subsidiary
to a third party, without the consent of Esso.[10] That would produce a result not dissimilar to the proposed
result in this case.
- For these reasons, it cannot be said that the JVA provides an
absolute right to an existing participant to determine the identity
of all
future participants in the JVA, or that clause 24 should be construed to give
effect to such a right.
- It is reasonable to assume that, at the time of drafting the
JVA, both sides had in contemplation the possibility that one or both
sides
might at some stage in the future undergo changes in corporate structure or
group needs. It would presumably have been in
the interests of both parties to
provide some degree of flexibility in this. In the case of change of
participant by assignment
to a related corporation, the requirement that the
assignor provide an ongoing guarantee was presumably intended to put some sort
of practical restriction on assignments without consent to entities unconnected
in any commercial sense with the assignor.
Temporary nature of subsidiary
relationship
- As SPP will be wound up once the assignment has occurred, SPV
will, at some point in the future, no longer be a related corporation
of SPP.
- Esso's construction argument seeks to infer into clause 24 a
requirement that, as at the time of assignment, SPP must intend that
its
related corporation remain a related corporation. It is said that to allow an
assignment to SPV in the present circumstances
is to defeat the intention of
clause 24.
- I agree with SPP that this argument is inconsistent with the
clear terms of clause 24.01(a), the last sentence of which clearly
contemplates
that a corporation which is related at the time of transfer may cease to be a
related corporation:
"Such guarantee will not cease merely because the assignee ceases
to be a Related Corporation."
- Clause 24 imposes no requirement that an assignee corporation
must remain related to the assignor for a specified minimum period
of
time.
- The last sentence in clause 24.01(a) was inserted into the
final JVA, but did not exist in earlier heads of agreement or the initial
JVA.
It must be assumed that the parties turned their minds to the question of
change of corporate structure when this sentence was
inserted, and agreed that
there was no need for an assignor to remain related to an assignee after an
assignment had occurred.
The assignor simply had to continue to guarantee the
assignee's obligations.
Financial position of the assignor
- Of course, one consequence of SPP going into liquidation will
be that any guarantee given by it will be worthless.[11] However, even if it did not go into liquidation, its
current financial position is such that its guarantee would be worthless.[12]
- Esso expressly conceded that the remaining participant must be
taken to have accepted the commercial risk that an assignor's guarantee
is only
as good as the financial position of the assignor.
- This is consistent with the general structure of the JVA, in
which each participant accepts the commercial risk that it may end
up in a
joint venture with a company that is unable to fund substantial works. For
example, the insolvency or administration of
one participant is not an event of
default under the JVA, such as might entitle the other to terminate the JVA or
exercise some right
to acquire the other's interest. As is discussed later in
these reasons, if a participant is unable to fund its participation, that
affects its entitlement to off-take from the project and its voting
rights.
Purpose of creating a subsidiary
relationship
- It is common ground that SPV has been structured as a
subsidiary of SPP for the sole purpose of attracting the operation of clause
24.01(a) and thus to avoid the requirement which would otherwise arise for
Esso's consent and for its pre-emptive right to be observed.
- This particular structure has apparently been driven by the
fact that SPP is both in receivership and under administration. Were
that not
the case, the same result could be achieved, without any possible objection
from Esso, by adopting the route to which I
referred in paragraph
76.
- Esso repeatedly referred to this in pejorative language as
being a "contrivance", an "artifice", a "device" or a "loophole". Such
descriptions rather beg the question as to whether the proposed assignment is
permitted under the JVA.
- On the other hand, SPP argued that the purpose of the
structuring is irrelevant. It says that it is either entitled to use clause
24.01(a) in this manner or it is not. As a matter of construction, I agree
with SPP.
Alternative arguments
- Even if the proposed assignment might be permitted as a matter
of strict construction of clause 24, Esso says that SPP's proposed
assignment
should be characterised as follows:
(a) It has been proposed not by SPP but by Mr Browning in the
interests of the larger creditors of SPP;
(b) It involves the establishment of a new company to purchase an
assignment of SPP's interest which is to be "technically" a subsidiary
of
SPP;
(c) The technical status of being a subsidiary is to be achieved
by giving SPP some limited and possibly temporary "control" over
the
composition of the board of SPV;
(d) This is done, so it is said, to "comply" with the JVA. In
fact it is done to prevent the operation of the consent and preferential
right
of purchase provisions of the JVA.
(collectively, "the offending features").
- Esso concedes that each of the offending features may not be
objectionable in itself, but says that their combined effect is such
as to
constitute a "contrivance". Even if, on its proper construction, clause
24.01(a) would permit the proposed assignment, Esso
says that the offending
features mean that the assignment would contravene certain implied terms or the
express terms of clause 27.
- It is useful at this point to consider the general nature of
the JVA and the parties' obligations under it.
- The JVA is a long term agreement for the development and
exploitation of a major mineral resource. Whilst presently suspended for
economic reasons, when it proceeds it will involve its participants in the
expenditure of hundreds of millions of dollars in carrying
out its objectives.
Esso is the project operator. There is a project operating committee which
contains representatives from all
participants. JVA participants have a right
but not an obligation to participate in the development of the project. In
very simplified
terms, if a participant does not contribute financially, its
off-take from the project is reduced to nothing and it does not have
a casting
vote on the operating committee.
- Esso says that the JVA is quintessentially a contract of a
type which requires good faith in performance and fidelity to the bargain,
as
well as trust and confidence of the kind necessary in any partnership or like
relationship. It is perhaps trite to observe, but
joint venture agreements can
vary enormously and do not all give rise to the same relationships, as the High
Court noted in United Dominions Corporation Limited v Brian Pty Ltd[13], in the context of fiduciary
obligations.[14]
- I turn to consider the specific alternative
arguments.
Clause 27
- Esso claims that the proposed assignment will be in breach of
clause 27 of the JVA, which is in the following terms:
"CONFLICT OF INTEREST
Subject to this agreement each Participant shall at all times
during the currency of this agreement use its best endeavours to ensure
that no
action is taken by itself, its servants, agents or contactors which could or
might result in or give rise to the existence
of conditions prejudicial to or
in conflict with the best interests of the other Participant in respect of this
Joint Venture. In
particular, but without limiting the generality of the
foregoing, a Participant shall take or cause to be taken all necessary and
proper precautions to prevent its servants, agents and subcontractors from
receiving from or making, providing or offering to any
person who could or
might be in a position to influence the decisions hereunder of the other
Participant with respect to the Project
any substantial gift, entertainment,
payment, loan or other consideration. Nothing in this article shall preclude
either Participant
from carrying on its normal course of business outside the
Area."
- The particular prohibition in clause 27 is directed at secret
commissions, bribes and the like. It is not entirely clear to what
actions,
other than those, this clause is directed. SPP argues that the heading
indicates that the clause is concerned only with
conflict of interest
situations within the confines of the ongoing operations of the joint venture,
of which this is not one.[15]
- It is not necessary for me to determine the precise scope of
clause 27. The obligations imposed by clause 27 are in their terms
"subject to
this agreement." If clause 24 specifically permits the proposed assignment,
then it will not be in breach of the more
general provision in clause
27.
Implied duty of co-operation
- In the further alternative, Esso says that there is an
implied term of the JVA that each participant will do all such things as
are
necessary on its part to ensure that the other will have the benefit of the
JVA. The term is said to be implied by law.
- Esso relies on High Court decisions such as Peters (WA)
Ltd v Petersville Limited[16] and
Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty
Ltd[17] as authority for the
general proposition that the law implies an obligation on one contractual party
to do all such things as are
necessary to enable the other party to have the
benefit of the contract.
- SPP argues that, in the Secured Income case, the High
Court proceeded on the basis of a passage in Mackay v Dick[18] in the following
terms:
"... where in a written contract it appears that both parties
have agreed that something shall be done, which cannot effectually be
done
unless both concur in doing it, the construction of the contract is that each
agrees to do all that is necessary to be done
on his part for the carrying out
of that thing, though there may be no express words to that
effect."
- SPP says that clause 24.01(a) does not refer to something
"which cannot effectively be done unless both parties concur in doing
it," and
therefore no implied term arises.
- However, the court in Secured Income went on to say
that the implied term is not limited to acts which require both parties to
concur.
"It is easy to imply a duty to co-operate in the doing of acts
which are necessary to the performances by the parties or by one of
the parties
of fundamental obligations under the contract. It is not quite so easy to make
the implication when the acts in question
are necessary to entitle the other
contracting party to a benefit under the contract but are not essential to the
performance of
that party's obligations and are not fundamental to the
contract. Then the question arises whether the contract imposes a duty to
co-operate on the first party or whether it leaves him at liberty to decide for
himself whether the acts shall be done, even if the
consequence of his decision
is to disentitle the other party to a benefit. In such a case, the correct
interpretation of the contract
depends, as it seems to me, not so much on the
application of the general rule of construction as on the intention of the
parties
as manifested by the contract itself."[19]
- Even if the existence of such an implied term is not
problematic, its scope and application to the particular facts may be. Neither
counsel was able to refer me to any case in which such a duty was implied in
circumstances analogous to these.
- It is not entirely clear just how it is said that such an
implied term would apply in the present case. It seems to be said that
there
is an implied term that Esso will have the benefit of the operation of clause
24 apart from clause 24.01(a), and SPP shall
not hinder or prevent the
fulfilment of the purposes of the express promises made elsewhere in clause 24.
It is said that the proposed
assignment will hinder or prevent that occurring.
- How can it be said that SPP is under a duty not to exercise a
contractual right to assign without consent, so that Esso can have
the benefit
of different provisions which govern assignments with consent?
Implied duty of good faith
- Esso says that it is now established, at least at
intermediate appellate level, that there is a further term implied by law in
commercial
contracts requiring the exercise of good faith in the performance of
the contract.
- Such a term prevents reliance on strict rights if, in the
context of the contract as a whole, this would subvert the character of
the
contract. In particular, Esso relies upon the comment by Barrett J in
Overlook v Foxtel[20]
that:
"The implied obligation of good faith underwrites the spirit of
the contract and supports the integrity of its character. A party
is precluded
from cynical resort to the black letter."[21]
- Here, it is said that SPP is making cynical resort to the
black letter of clause 24.01(a). The transaction has been structured
in this
way for the sole purpose of enabling a transfer to be made without consent.
Esso says that it is therefore appropriate and
proper to characterise that as
an evasion of the spirit of the bargain, because clause 24.01(a) could not be
seen on any view as
having been intended to operate in such a way. It says
that SPP is precluded by a duty of good faith implied in the JVA from
exercising
its contractual rights under clause 24.01(a) in the current
circumstances.
- This raises two questions. First, should a term of good faith
be implied in the JVA? Secondly, if so, is SPP's proposal in breach
of that
implied term?
Should a duty of good faith be implied into the
JVA?
- Such a term could not be implied by custom or usage, nor
would "business efficacy" or the "officious bystander" require its implication
in fact.[22] Counsel for Esso therefore
correctly focussed on whether such a term should be implied in law.
- Terms implied by law are generic. They can arise from the
nature, type or class of contract in question.[23] Terms can be implied into contracts of particular class
by statute,[24] because they have become part
of the common understanding,[25] or because
they are necessary to prevent the contract being undermined.[26]
- The High Court has not as yet expressly endorsed the
implication of a term of good faith into a commercial contract. In Royal
Botanic Gardens and Domain Trust v South Sydney City Council[27] the High Court recognised the debate in various
Australian authorities concerning the existence and content of an implied
obligation
or duty of good faith and fair dealing in contractual performance
and the exercise of contractual rights and powers. They noted
that the parties
before them had accepted that such an obligation applied to the exercise of the
lessor's powers under the relevant
rent review clause.
Accordingly:
"The result is that, whilst the issues respecting the existence
and scope of a `good faith' doctrine are important, this is an inappropriate
occasion to consider them".[28]
- Kirby J also noted that it was unnecessary to decide whether
Burger King Corp v Hungry Jacks Pty Ltd[29] and like authorities stood for the principle
that:
"both in performing obligations and exercising rights under a
contract, all parties owe to one another a duty of good faith: and the
extent
to which, if such were to be the law, a duty of good faith might deny a party
an opportunistic or commercial exercise of an
otherwise lawful commercial
right".[30]
- As the New South Wales Court of Appeal in Burger King
recognised, for a term to be implied at law in a new category of case, it must
be reasonable and necessary. Quoting from McHugh and
Gummow JJ in Byrne v
Australian Airlines Ltd, the Court noted that:
"Many of the terms now said to be implied by law in various
categories of case reflect the concern of the courts that, unless such
a term
be implied, the enjoyment of the rights conferred by the contract would or
could be rendered nugatory, worthless, or, perhaps,
be seriously
undermined..."[31]
- The decisions in which lower courts have recognised the
legitimacy of implication of a term of good faith vary in their suggested
rationales[32]. In Burger King
Rolfe J at first instance held, inter alia, that there was an
implied duty on a franchisor to act in good faith in the exercise of
contractual powers of termination of the
franchise agreement[33].
- On appeal, the Court of Appeal endorsed Sheller JA's
acceptance in Alcatel Australia Ltd v Scarcella[34] that an obligation of good faith in the performance of
obligations and the exercise of rights could be implied into commercial
contracts.
"A review of cases since Alcatel indicates that courts in various
Australian jurisdictions have, for the most part, proceeded upon
an assumption
that there may be implied, as a legal incident of a commercial contract, terms
of good faith and reasonableness."[35]
- The defendants in that case also contended that, to the
extent to which an obligation of good faith may properly be implied into
a
commercial contract, it cannot operate to prevent a party from promoting its
legitimate interests, or to block the express terms
of the contract. The Court
of Appeal stressed that the duty of good faith did not amount to a fiduciary
duty and did not preclude
a party from having regard to its legitimate
interests.
- Notions of `fairness' and `reasonableness' are a common
starting point when defining good faith. In Renard Constructions (ME) Pty
Ltd v Minister for Public Works,[36]
Priestley JA commented that reasonableness has `much in common' with a duty
of good faith.[37] Subsequent cases, such as
Burger King and Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust)
Pty Ltd[38], have held that the duty to
act fairly and in good faith will ordinarily be satisfied if a contractual
power is exercised reasonably.[39]
Reasonableness in the contracting process is therefore a common expectation of
good faith behaviour.
- In Garry Rogers, Finkelstein J also recognised that
where such a term may properly be implied it would not prohibit actions
designed to promote the
party's legitimate interests, although it would require
a party not to act capriciously.[40]
- In Far Horizons Pty Ltd v McDonalds Australia Ltd[41], a case which also involved a
franchise agreement, Byrne J observed that:
"I do not see myself at liberty to depart from the considerable
body of authority in the country which has followed the decision of the
New South Wales Court of Appeal in Renard Constructions (ME) Pty Ltd v
Minister for Public Works. I proceed, therefore, on the basis that there
is to be implied in a franchise agreement a term of good faith and fair dealing
which
obliges each party to exercise the powers conferred upon it by the
agreement in good faith or reasonably, and not capriciously or
for some
extraneous purpose. Such a term is a legal incident of a contract."[42]
- It has also been recognised that such an implied term would
have to be consistent with the express terms of the agreement. In Burger
King the Court of Appeal accepted that:
"an implied covenant will only aid and further the explicit terms
of the agreement and will never impose an obligation which would
be
inconsistent with other terms of the contractual relationship."[43]
- The Western Australian Court of Appeal in Central Exchange
Ltd v Anaconda Nickel Ltd[44] also
accepted that the principles of good faith could not block the use of terms
that actually appear in the contract.
- In assessing the standard of conduct required by a duty of
good faith, courts have made reference to the `legitimate interests'
of the
parties, or have suggested that good faith should prohibit a party from
exercising a contractual power `capriciously' or "for
an extraneous purpose".[45] The judgment of Sheller JA in Alcatel
identifies the correlation between the two concepts:
"If a contract confers power on a contracting party in terms
wider than necessary for the protection of the legitimate interests of
that
party, the courts may interpret the power as not extending to the action
proposed by the party in whom the power is vested or,
alternatively, conclude
that the powers are being exercised in a capricious or arbitrary manner for an
extraneous purpose, which
is another way of saying the same thing."
[46]
- This approach entitles a party to engage in conduct which
protects its own legitimate interests, but also requires consideration
of the
interests of the other party to the contract. By curtailing a party's right to
act self-interestedly in this way, good faith
imposes a narrower and less
onerous standard than that required of fiduciaries.
- The obvious question in this context is what amounts to a
"legitimate interest". This inquiry arises when a party has allegedly
acted
either in a way which is beyond what is necessary to achieve its legitimate
interests, or in a fashion which fails to take
into account the legitimate
interests of the other party. In the Garry Rogers and Overlook
decisions, the courts adopted a broad construction of what is considered to
be a "legitimate interest".
- In Garry Rogers, the supplier of Subaru cars issued a
notice of termination to one of its car dealers, because the dealer initially
refused to comply
with a "Six Star Revitalisation Program". In his decision,
Finkelstein J held that the supplier's conduct was not in breach of an
implied
duty to act in good faith.[47] Terminating the
contract was in the supplier's own business interests, as the dealer's original
refusal indicated that he was not
willing to act in the best interests of the
dealership group as a whole.[48]
- In the Overlook case, Overlook provided Foxtel with
Greek and Italian language channels, in return for a percentage of the
subscription price to those
channels. Foxtel later reduced the price of the
add-on channels in an endeavour to improve subscriber numbers and to lure Greek
and Italian customers from Optus. Overlook alleged that this was in breach of
the implied obligation to act in good faith in the
performance of the contract.
In rejecting Overlook's claim, Barrett J held that Foxtel's reduction in price
was a legitimate business
judgment in the interests of both parties. Foxtel's
decision recognised that there would be a fall in revenue for both parties, but
was made in the expectation that increased market penetration would eventually
reap suitable rewards.[49]
- The decisions in both Garry Rogers and Overlook
illustrate that the concept of "legitimate interests" does not have to
refer to a party's immediate commercial interest, but can be
used to validate
behaviour in the longer-term interest of one, or both, of the parties.
- Nettle J concluded in Cathedral Place Pty Ltd v Hyatt of
Australia Ltd & Ors:[50]
"Even allowing for the existence of an implied obligation of good
faith and fair dealing, about which I suppose there can no longer
be too much
doubt, there is no lack of good faith or fair dealing in a party to a contract
acting to promote its own interests consistently
with the basis on which it
entered into the contract."
- Dodds-Streeton J in Varangian Pty Limited v OFM
Capital[51] also said that the authorities
indicate that if a term of good faith and reasonableness prohibiting the
exercise of powers capriciously
or for extraneous purposes is be implied into a
contract such as the JVA, it could not operate to restrict actions designed to
promote
the legitimate interest of SPP.
- Good faith can also be regarded, conceptually, as an
obligation to refrain from acting in "bad faith". This "excluder" approach
was
first articulated by Professor Summers, who identifies "bad faith" conduct as
encompassing: evasion of the spirit of the deal,
wilful rendering of only
substantial performance, abuse of a power to determine compliance,
interference, and failure to cooperate
in the other party's performance.[52] The excluder approach has received some
Australian judicial support in Renard Constructions[53] and Overlook,[54]
and was recently acknowledged in England by Lord Scott in Manifest Shipping
Co Ltd v Uni-Polaris Shipping Co Ltd:
"Unless the assured has acted in bad faith, he cannot, in my
opinion, be in breach of a duty of good faith, utmost or otherwise."
[55]
- By enabling judges to compare the conduct in question with a
check-list of "bad faith" behaviour, excluder analysis is said to help
them to
form views about whether a breach of good faith has occurred. However, whether
it does anything to extend the definition
of good faith beyond questions of
reasonableness, legitimate interests and extraneous purposes is highly
debatable.
- As mentioned earlier, Esso relies heavily on the comments of
Barrett J in the Overlook case, that the duty may be implied to prevent
cynical resort to the black letter of the contract. These comments have not
been widely
picked up, and reflect the "high water mark" for Esso's argument.
Barrett J's comments were explained by Gzell J in Commonwealth Bank of
Australia v Spira[56] in the
following terms:
"A party is precluded from cynical resort to the black letter but
is not fixed with a duty to subordinate self-interest entirely.
The duty is
not one to prefer the interests of the other contracting party. Rather it is a
duty to recognise and to have due regard
to the legitimate interests of both
parties in the enjoyment of the fruits of the contract delineated in its
terms"[57].
- In Spira, Gzell J considered that the duty of
good faith applied to a facility agreement between a bank and a commercial
borrower, but found
that the term of good faith had not been breached, in
circumstances which included variations to the agreement and the provision
of
further funding in which the lender was entitled to consider its legitimate
commercial interests, even if they were inimical to
those of the borrower.[58]
What is the content of such a duty in this
case?
- Assuming that some general duty of good faith can be implied
into the JVA, the real question is what its exact content might be
in the
present case.
- Esso argues that the provisions of clause 24 as a whole
confer rights on the non-assigning participant, in this case Esso, which
it is
legitimately entitled to perform without evasion. The scope and extent of those
rights must be assessed before and in the absence
of any conduct that defeats
or undermines them. By using clause 24.01(a) to "evade" the requirement for
Esso's consent and its pre-emptive
purchase right, it is said that SPP is
defeating or seriously undermining Esso's rights or legitimate expectations to
due performance
of the remainder of clause 24. The intended "evasion" of
clause 24 is said to be an act of bad faith in the performance of the contract
and thus a breach of the implied duty of good faith.
- Although the offending features are said to demonstrate a
lack of good faith, Esso concedes that none of them would constitute bad
faith
in themselves. Nor is it suggested that the giving of a guarantee by an
insolvent assignor would be an act of bad faith; as
has previously been
mentioned, it is accepted that the insolvency of a participant/assignor was one
of the commercial risks agreed
by the parties.
- SPP says that even if such a term could be implied into the
JVA generally, it could not operate to restrict actions designed to
effect the
legitimate interest of SPP to assign its interest in the JVA in compliance with
article 24.01(a).
- SPP concedes that there may well be clauses in the JVA in
respect of which one or both parties has to exercise its rights under
an
implied duty of good faith. The entitlement of a participant to withhold
consent to a requested assignment under article 24.01(b)
was suggested to be
one such example. However, it is said that clause 24.01(a) is not such a
clause.
- SPP also argues that the parties have chosen to impose an
obligation of good faith in certain provisions of the JVA, which negates
any
implication of good faith elsewhere. The duty to negotiate in good faith
prescribed by clause 18 of the JVA was proffered as
one such example. However,
it is well established that the duties to perform and negotiate in good faith
are different legal creatures.
I do not accept that this particular argument
would defeat the implication of an implied term of the type contended for by
Esso.
- If clause 24.01(a) entitles SPP to assign to SPV in the
manner and circumstances proposed, as I have found it does, there is no
lack of
good faith or fair dealing in SPP acting to promote its own interests
consistently with the basis on which it may be taken
to have entered into the
contract.
Conclusion
- For these reasons, Esso is not entitled to the permanent
injunctive relief which it seeks. I propose to make a declaration as sought
by
SPP in its counterclaim.
- I will hear from the parties in relation to the precise form
of orders.
---
[1] Section 444B of the
Corporations Act 2001.
[2] Proceeding No NSD 1336 of 2004.
[3] In some places, the JVA describes its
provisions as articles, in others as clauses. I will refer to them all for
simplicity as
clauses.
[4] [1982] HCA 24; (1981-1982) 149 CLR 337 at 352.
[5] [2004] HCA 35; (2004) 78 ALJR 1045; 208 ALR 213.
[6] [2004] HCA 52.
[7] [1973] HCA 36; (1973) 129 CLR 99 at 114-5.
[8] At 109. See also Hide & Skin
Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 per Kirby P
at 313.
[9] This concession assumes that, when SPV is
incorporated, its constitution will reflect the power of appointment of
directors which
is described in the draft DOCA.
[10] Apparently that route is not being used in
the present case because the shares in any wholly-owned subsidiary would fall
within
the terms of the charge, and the unsecured creditors would lose the
benefit of the SPP JV interest to the secured creditor.
[11] I understand that it is proposed that
the directors and not the administrators will approve and execute any such
guarantee. It
is not necessary for me to consider here the possible personal
liability of any director who executes a guarantee on behalf of an
insolvent
company.
[12] The reality is that Esso is currently in
a joint venture with a party which is now unable to fund any of its obligations
under the
JVA in the event that the Rundle project started up again.
[13] [1985] HCA 49; (1985) 157 CLR 1 at 10-11.
[14] Although there was initially a claim in
this proceeding based on fiduciary duties, that was abandoned at trial.
[15] There is no provision in the JVA to the
effect that headings may not be considered in construing operative
provisions.
[16] [2001] HCA 45; (2001) 205 CLR 126 at 142.
[17] (1979) 14 CLR 596 at 607-8.
[18] (1881) 6 App Cas 251 at 263.
[19] At 607-8 per Mason J.
[20] [2002] NSWSC 17; (2002) Aust Contract Reports 90-143.
[21] At 91-970.
[22] Burger King Corporation v Hungry
Jacks Pty Ltd [2001] NSWCA 187 at [164]. Cathedral Place Pty Ltd v
Hyatt of Australia Ltd and Ors [2003] VSC 385.
[23] Breen v Williams (1996) 186 CLR
71 at 103 per Gaudron and McHugh JJ.
[24] Breen v Williams.
[25] Byrne v Australian Airlines Ltd
[1995] HCA 24; (1995) 185 CLR 410 at 449.
[26] Byrne at 450.
[27] (2002) ALR 289.
[28] Royal Botanic Gardens at 301 per
Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ
[29] [2001] NSWCA 187 per Sheller , Beazley
and Stein JJA
[30] Royal Botanic Gardens at 327
[31] Byrne at 450
[32] See Peden, E, Good Faith in the
Performance of Contracts, Lexis Nexis Butterworths, Australia,
2003.
[33] Burger King at [141].
[34] (1998) 44 NSWLR 349.
[35] Burger King at [159].
[36] (1992) 26 NSWLR 234.
[37] Renard Constructions at 263.
[38] [1999] FCA 903; (1999) ATPR 41-703.
[39] Burger King at [169]-[187].
[40] Garry Rogers at [43,014-43,
016].
[41] [2000] VSC 310.
[42] Far Horizons at 30.
[43] Burger King at [173].
[44] (2002) 26 WAR 33.
[45] Alcatel at 368; Burger
King at [165]; Garry Rogers at 43,014; Far Horizons at
[115].
[46] Alcatel at 368.
[47] Garry Rogers at 43,014-15.
[48] Garry Rogers at 43,016.
[49] Overlook at [78].
[50] [2003] VSC 385 at 53
[51] [2003] VSC 444 at 175
[52] RS Summers, " `Good faith' in General
Contract Law and the Sales Provisions of the Uniform Commercial Code" (1968) 54
Virginia Law Review 195 at 206.
[53] Renard Constructions at 267-268
[54] Overlook at paragraph 70
[55] [2001] UKHL 1; [2001] 2 WLR 170
[56] [2002] NSWSC 905
[57] CBA v Spira at [155]
[58] At [161]
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/cases/vic/VSC/2004/477.html
